The banks decision this week to put up fixed term interest rates on mortgages has shown once again that they are more interested in profiteering than supporting the community.
In the past the local bank manager was considered the most respected member of the community but these days you are lucky to see a manager with the preferred means of doing business with a bank through ATM’s and telephone banking. How things have changed.
It definitely pays to be a shareholder of the bank these days as increased profits means the share price rises and dividends remain high but given that banks are an essential service I believe something needs to change. Since the deregulation of the banking sector prices for basic services have increased significantly, in some cases greater than inflation and yet competition has decreased making it harder to shop around and get a good deal. Surely there has to be a balance between being commercial and community minded especially for these essential services.
So what can we expect in the market?
In my report earlier this month I indicated that I expected the market to fall for at least one to two weeks this month, and while it did fall way to within two points of confirming a lower low than the previous week’s low, it rallied strongly on Thursday. It is still possible that the market will fall next week, however, as I indicated last week, given that the previous high of 3762.50 achieved on 9 January was broken on Friday 17 April, my outlook is starting to change.
Right now any fall is likely to be short term and minor in price, therefore investors should not be too concerned. That said my expectation is that the market will actually rise over the next two or three weeks to a high of around 4200 points before it falls into a low over one or two weeks sometime between 7 and 22 May. Once this low is confirmed I believe we will see prices rise again moving up to my next price target of around 4500 points sometime in June or July.
Dale Gillham
Chief Analyst
Wealth Within
